Each morning I read a New York newspaper that is world renowned for its journalistic excellence but is often taken to task by conservatives. Its coverage is complete, and for the most part its articles are well researched. Recently, however, an Op Ed writer demonstrated a stereotype and uninformed attitude toward corporate jets, as if those two words were an affront to America.
Segments of the press as well as parts of the Obama Administration seem to have a blind eye toward the role that Business Aviation plays in the economic growth and quality of life of our nation. Transportation is an enabling technology for business success. Without the ability to bring the ebb and flow of commerce to all of America, including those rural areas where workers are available and quality of life is good, our nation would concentrate industry in locations served only by the Airlines. In addition to limited economic development, such massing of industry in urban centers would lead to more congestion and other social problems.
Scheduled Airlines provide service to about 10 percent of the locations in the USA with public-use airports, but most business-friendly schedules connect about 1 percent of cities and towns with airports available to business. Consider that statistic—99 locations out of every 100 with public-use airports lack business-friendly service by scheduled Airlines. Except between major hubs, scheduled air carriers are unable to facilitate efficient business travel for companies that wish to see customers or manage employees in several cities in one day or avoid time-consuming overnight stays.
Furthermore, the scheduled Airlines do not want to serve locations where the demand for public air transportation is low. Even at major hubs, schedules have been cut to assure higher load factors. Airline departures from secondary hubs have been reduced by over 20 percent in the last five or so years. The Airline business model simply does not address many needs of business. Our nation requires Business Aviation to fill the transportation gap not served by the Airlines. In fact, the Airlines and Business Aviation are partners in providing our nation with safe and efficient transportation needed for economic development.
Critics argue that owners of corporate jets get unfair tax breaks and do not pay their fair share for use of the nation’s Air Traffic Control system. They fail to realize, or acknowledge, that a business aircraft is treated like other capital assets. To be subject to the tax rules for depreciation and deductions of operating costs, the asset must be ordinary and necessary to the furtherance of the company’s business. Business use must be the primary reason for the company’s ownership, and when used personally appropriate adjustments must be made to the company’s and the individual’s tax liabilities. If a company provides too much personal use, the corporate jet is not considered a business asset.
I believe a corporate jet receives greater scrutiny than any other company asset. The IRS is quick to examine any claims to deduct aircraft expenses. Shareholders often exhibit the same skepticism as the press and the government. Thus Boards of Directors are very careful that a corporate jet is managed with a degree of professionalism and honesty that passes the most careful review.
The fare-share issue has been well vetted. All users of corporate jets pay a fuel tax that compensates the government for Business Aviation’s marginal use of an ATC system that would exist even if all corporate jets and private aircraft were grounded.
Regarding the use of a corporate jet to assure efficient use of time and to provide security while traveling, no one seems to question why our nation’s CEO must use Air Force One. Nor should critics of Business Aviation fail to attribute the same needs to company CEOs.
I urge all who understand and appreciate the benefits of Business Aviation to inform friends and colleagues about the reasons why corporate jets are beneficial to our nation’s wellbeing, even for the many citizens who do not use them directly. (The company with a business aircraft may well be their employer or customer.) By doing so, we who believe in Business Aviation’s many benefits to our nation may not be so disappointed when a respected journalist addresses corporate jets.